The cost of living in the United States jumped in May by the most in more than two years as prices at the pump surged by the biggest amount in nearly six years, according to government data released on Thursday, June 18.
Inflation over the past year, however, was unchanged and that was after falling for the steepest decline in 5-1/2 years through the 12 months ended April.
Consumer prices jumped 0.4% in May after edging up 0.1% in April, the US Labor Department showed in its monthly report on the Consumer Price Index (CPI). The CPI measures what Americans pay for everything from cars, to gasoline, to fruits and vegetables. The monthly advance was the biggest since February 2013.
Like the 12-month reading on inflation, American are catching a bit of a break at grocery stores with overall food prices unchanged for a second month in a row. That landscape has changed compared to last year when the cost of food climbed on every single month. Food prices are still 1.6% higher than a year ago.
As for gasoline prices in May, they soared 10.4% for the largest one-month increase since June 2009 after falling 1.7% in April. Gas pricing gains were largely responsible for driving the CPI higher. They are expected to rise more with the summer driving season here, but less than last year. Prices at the pump have already plunged 25% compared to a year earlier.
The broader price category for energy went up 4.3% last month after falling 1.3% previously, and is down 16.3% from a year ago.
Stripping out energy and food, so-called core consumer prices rose 0.1% in May after surging 0.3% in April for the biggest increase since January 2013. They advanced 0.2% in each of the months from January through March. Within several watched groupings, May changes include:
- shelter, up 0.2%,
- new vehicles, up 0.2%,
- used cars and truck prices, down 0.4%,
- airline fares, up 5.7%
- clothing, down 0.5%,
- transportation, up 0.7%,
- medical care commodities up 0.4%,
- medical care services up 0.2%,
- tobacco, up 0.4%, and
- alcoholic beverages, up 0.2%.
In the longer period and as already discussed, US inflation was muted at 0% in the 12 months through May after falling 0.2% in April for the largest drop in inflation rates since October 2009 . These latest two annual readings followed:
- a dip of 0.1% in March,
- 0% in February, and
- a decline of 0.1% in January.
January’s decline was also the first 12-month drop since October 2009.
In rounding out the Labor Department’s report, core US inflation increased 1.7% on a year-over-year basis compared to 12-month advances of 1.8% through April and March. (Read about core inflation.)
"Inflation has continued to run below our longer-run objective, but some of the downward pressure on inflation resulting from earlier sharp declines in energy prices is abating," Fed Chairwoman Janet Yellen said in a press conference following the Fed’s two-day monetary policy meeting.
The core annual reading is the benchmark inflation rate monitored by the Federal Open Market Committee (FOMC) as it helps the central bank decide where to set the key interest rate.
"The Committee continues to judge that the first increase in the federal funds rate will be appropriate when it has seen further improvement in the labor market and is reasonably confident that inflation will move back to its 2 percent objective over the medium term," Yellen added.
Other 12-month advances in core inflation include 1.7% through February and 1.6% through January.
"Inflation is way below where the Fed is hoping it’ll end up," Bloomberg News quoted Nariman Behravesh, chief economist for IHS Inc. in Lexington, Massachusetts. "The pace of interest rate hikes is going to be very, very slow."
Inflation data follows. The table presents monthly and annual percentage changes in the prices of consumer goods and services that are surveyed, analyzed and then summarized by the US Labor Department’s Bureau of Labor Statistics (www.bls.gov/cpi).
November 2014 – May 2015 Consumer Prices – Gains & Losses in Percent
|Nov 2014||Dec 2014||Jan 2015||Feb 2015||Mar 2015||Apr 2015||May 2015||12 Month|
|Food at home||0.1||0.2||-0.2||0.1||-0.5||-0.2||-0.2||0.6|
|Food away from home||0.4||0.3||0.2||0.3||0.2||0.2||0.2||3.0|
|Gasoline (all types)||-7.2||-9.2||-18.7||2.4||3.9||-1.7||10.4||-25.0|
|Utility (piped) gas service||-1.3||1.4||-3.4||-2.0||-2.7||-2.6||.0||-15.4|
|All items less food, energy||0.1||0.1||0.2||0.2||0.2||0.3||0.1||1.7|
|Commodities less food, energy||-0.3||-0.2||-0.1||0.2||0.3||0.1||-0.1||-0.3|
|Used cars and trucks||-0.9||-0.8||-0.1||1.0||1.2||0.6||-0.4||-0.5|
|Services less energy||0.2||0.2||0.3||0.1||0.2||0.3||0.2||2.4|
Bureau of Labor Statistic data on United States inflation is published monthly and usually around the mid-month time frame. The information details consumer prices through to the previous month. Consumer Price Index data with June inflation and through to the latest annual period becomes public on July 17, 2015.
CPI data is used in calculating inflation rates and it is the backbone for this site’s calculator for inflation. The US Inflation Calculator provides accumulated inflation and the change in buying power of the US dollar over time.